456 



C omm ittee rejection of restricted cost effectiveness formulas 



The final report of the committee did not explicitly dipcuss Circular 

 A— iT, the Green Book, or other formulas for determining whether 

 water projects should or should not be supported. Indirectly, the 

 report rejected a policy of detailed cost/effectiveness of water projects, 

 AA-ith each function at each site specifically paying its own way. The 

 rejection took several related forms: 



First, the emphasis on State and local needs and interests tended 

 to contradict the earlier concept that there should be a national 

 standard of costs and benefits. The report noted that the dimensions 

 of tlie Avater problem tended to A^ary from place to place, with many 

 alternati\'e solutions; this seemed inconsistent AA-ith any formula. 

 With respect to time, also, it AA-as impossible to maintain a fixed solu- 

 tion. Indeed, the report stated: 



Tt is unlikely that the Nation will eA'er have a uniform polir-y coA^erins' the 

 fletails of all Avater resources activities in all parts of the country. Conditions 

 vary from place to place, and from year to year * * *. 



The earliest Federal internal improvements in the water resources field were 

 in response to social pressures for economie expansion and development. In a 

 later period the emphasis was placed on Federal development as a means of 

 counteracting: concentration of economic power or monopoly in private interests. 

 At another time public desire for the conservation of renewable resottrces became 

 an important motivation for Federal activity in water resources development. 



* * * In rlie future the increasing trend toward urbanization may bring about 

 needs for Federal participation in ways that cannot be foreseen at this time. 

 Therefore, rather than to attempt to define the boundaries of Federal participa- 

 tion, the committee believes that its task is to point out \A'ays for the Nation to 

 prepare itself to perform the tasks which will become increasingly obvious as 

 the years go by.^ 



Clearly, urgency of need might liecnme extremelA' acute, at some time 

 or in some area, thereliy iuA'alidiating precise dollar-formulas of cost/ 

 eiTectiA'eness. 



From another point of A'ieAv, the emj^hasis of the committee on total 

 river basin solutions, and ])lans for maximum utilization, seem to haA-e 

 been inconsistent with the cost/effectiA-eness formula approach. In- 

 stead of deA-eloping a fixed approach, the committee seemed to be ad- 

 A'ocating continuing study of resources and requirements, so that pol- 

 icie-^ could be adapted to changes in circumstances. Said the report: 



The eventual need for full regulation of surface water supplies has led to 

 suggestions that all reservoirs should be designed and constructed to the point of 

 optimum deA'elo]iment of the site. This might involve m^^king investments in 

 additional storage before economic justification could be shown by our present 

 methods of computing benefit-cost ratios. Flexibility would have to be worked 

 into the design of the dam and control works so that they could be readily 

 adapted to use for various purposes at different periods during the life of the 

 f-tructnre. 



.is a me^ns of resolving some of these questions having to do with possible 

 future needs for reservoirs, the committee believes it would be desirable for a 

 detailed study to be made by the water t^esources agencies of the Federal Gov- 

 ernment, in cooperation with appr.opriate State agencies, of the future needs 

 for reservoirs and availability of reservoir sites in the United States." 



On the nue=tion of the use of formulas for the allocation of costs 

 l^aid in return for benefits from water projects, the report took an 

 equally relaxed and flexible attitude. It noted that Federal iuA^est- 

 ment in water facilities tended to be primarily for unrecoA^erable or 



•■'Tlii<1.. p. 22. 

 '•'• Ibifl.. p. 47. 



